UK house prices in January & February: flat overall, busier at the right price

January and February have felt less like a “boom” and more like a market finding its balance: prices broadly steady, activity improving in pockets, and buyers extremely price-conscious.

As an estate agency covering the whole country, our day-to-day experience aligns with the national data: homes priced correctly attract viewings and offers, while anything even slightly optimistic tends to sit until it’s adjusted.

The headline numbers: steady, with a small early-year lift

The big indices broadly support a “flat-to-gently-positive” story:

• Halifax reported the average UK home at £300,077 in January 2026, with prices up 0.7% month-on-month and up 1.0% year-on-year.
• Nationwide also showed a modest improvement in January: +0.3% month-on-month and +1.0% year-on-year.
• Rightmove’s February asking-price index described prices as essentially standing still: down £12 (0.0%) to £368,019.

What that means in plain English: completed-sale indices (Halifax/Nationwide) are showing small gains, while asking prices in February were basically unchanged - exactly the sort of “flat but functioning” market many buyers and sellers are feeling.

Mortgage backdrop: approvals dipped, but pricing has improved

On the lending side, the tone is cautious rather than exuberant.

The Financial Times reports that mortgage approvals fell to around 60,000 in January 2026, the lowest since January 2024, while the effective interest rate on new mortgages fell to ~4.09% - helping affordability even as buyer confidence remains measured.

This helps explain why the market can feel contradictory:

• people are back looking,
• but they’re not stretching,
• and they’re quick to negotiate if the price doesn’t feel sharp.

Where we’re seeing the most momentum: first-time buyers and “first-step” pricing

Across many regions, the most consistent demand is in first-time buyer territory, often around the “first-step” price points (in our experience frequently below £500k, depending on the area).

There’s solid evidence behind the broader theme that first-time buyers are more active when affordability improves:

• Nationwide’s research explicitly notes that improving affordability supported first-time buyer activity over 2025.
• Savills also highlights “robust” activity supported by high numbers of first-time buyers, citing 384,000 FTB mortgage completions in the year to September 2025 (highest since the Global Financial Crisis, excluding a brief post-Covid spike).
• Zoopla’s January update says buyer demand rebounded early in 2026 and that stock levels are the highest for eight years, meaning buyers have more choice - so sellers need to “price carefully.”

Our read: buyers at these entry levels are active, but they’re also the most budget-driven. That’s why we’re seeing strong interest in well-presented homes that feel “fair value”, and tougher conversations where pricing doesn’t align with comparable sold data.

Buyers are price-conscious, and negotiations are firmly back

This isn’t a market where you can “test the water” with an ambitious number and expect it to work itself out.

Two credible sources back up that realism is now central:

• The RICS January 2026 Residential Market Survey describes activity indicators improving from recent lows but still cautious overall—consistent with a market that’s not accelerating sharply.
• Zoopla’s January release is blunt that with more homes available, sellers should price carefully - because buyer choice puts downward pressure on overpricing.

Practical implication: buyers are comparing more options, pushing harder on price, and expecting the asking figure to be defensible - especially for anything needing work.

What this means right now

If you’re selling in 2026

• Price to today’s comparables, not last year’s headlines. With more choice available to buyers, price discipline matters.
• Remove uncertainty early. For flats, have lease length, service charge history, and planned works ready up front - buyers are scrutinising total cost.
• Expect negotiation. It’s a more measured market, and buyers are cautious on affordability.

If you’re buying

• Focus on monthly affordability as well as price - mortgage pricing has improved but budgets remain tight.
• If it’s a flat, treat service charges as a core affordability test, not an afterthought.
• Be decisive on properly priced homes - “fair value” is still attracting competition in many areas, especially at first-time buyer levels.

Useful links

The data sources referenced:

• Nationwide - House Price Index (latest reports)
• Halifax - House Price Index
• Rightmove - House Price Index (asking prices)
• ONS - Private rent and house prices, UK (February 2026)
• ONS - Private rent and house prices, UK (January 2026)
• Bank of England - Money and Credit (January 2026)
• Bank of England - Statistical releases (hub)
• RICS - UK Residential Market Survey